Release Details

SAN DIEGO, Nov. 1 /PRNewswire/ -- Neurocrine Biosciences, Inc. (Nasdaq: NBIX) today announced its financial results for the three and nine months ended September 30, 2001. For the third quarter the Company reported net income of $2.5 million, or $0.09 per share diluted compared with a net loss of $11.0 million or $0.50 per share for the same period last year. For the nine months ended September 30, 2001 the Company had a net loss of $22.3 million, or $0.87 per share compared with a net loss of $22.3 million, or $1.02 per share for the respective period in 2000. The Company reported net income during the third quarter 2001 primarily due to the achievement of a $15.5 million milestone payment under the GlaxoSmithKline (GSK) agreement. Net losses are anticipated for the fourth quarter and year ended December 31, 2001.

The Company also announced today that it has received a phase II SBIR grant from the National Institutes of Health (NIH) to fund the development of orally active GnRH receptor antagonists. The grant will total approximately $1 million over a two-year period and will support research to discover and evaluate small molecule GnRH receptor antagonists for the treatment of uterine fibroids, endometriosis, breast cancer, prostate cancer, infertility and other disorders linked to the reproductive endocrine system. In addition, Neurocrine has selected an orally active GnRH antagonist development candidate for the treatment of endometriosis, uterine fibroids and prostate cancer. The program is scheduled to begin Phase I clinical studies in the fourth quarter of 2001.

Revenues for the third quarter of 2001 were $21.6 million compared with $2.4 million for the same period last year. Revenues for the nine months ended September 30, 2001 were $28.4 million compared with $8.1 million in 2000. The net increase in revenues primarily resulted from the 2001 GSK and 2000 Taisho collaborations offset by a decline in revenues resulting from the completion of the sponsored research portion of the collaboration with Janssen Pharmaceutical, N.V.

Research and development expenses increased to $18.3 million for the third quarter of 2001 compared with $12.5 million for the respective period in 2000. For the nine months ended September 30, 2001, research and development expenses were $49.6 million as compared to $28.4 million for the comparable period in 2000. The increase in expenses reflects higher costs associated with expanding later phase clinical development activities and the addition of scientific personnel as the Company advances its drug candidates through advanced clinical testing.

General and administration expenses decreased to $2.1 million for the third quarter of 2001 compared with $2.5 million for the same period last year. For the nine months ended September 30, 2001, general and administrative expenditures increased to $7.3 million compared with $6.9 million in 2000. The decrease in expenses in the third quarter of 2001 resulted primarily from lower management consulting fees associated with the Taisho agreement. For the nine months ended September 30, 2001, lower management consultant fees were offset by increases in administrative personnel expenses, primarily scientific personnel recruiting and relocation costs, and professional service expenses, predominantly legal services to support the Company's expanded clinical development efforts.

The Company's balance sheet on September 30, 2001 reflected total assets of $178.0 million, including cash, cash equivalents, marketable securities and current receivables of $161.0 million compared with balances at December 31, 2000 of $186.0 million and $170.6 million, respectively. The decline in cash, cash equivalents, marketable securities and current receivables represent increased funding of current period multiple clinical development projects.

Commenting on the Company's performance, Paul W. Hawran, Executive Vice President and Chief Financial Officer for Neurocrine Biosciences stated, "We are pleased with the strong financial performance of the third quarter of 2001. Our collaboration with GlaxoSmithKline has resulted in the significant accomplishment of an additional milestone which strengthens our financial condition and expands our CRF Receptor Antagonist program. This milestone achievement triggered a payment of $15.5 million, bringing the total fees received by Neurocrine to date in the collaboration to $25.5 million. During the third quarter we also reported additional positive Phase II results with NBI-34060 in 331 subjects with transient insomnia. Based upon the results of multiple successful Phase I and Phase II trials completed with NBI-34060 in Chronic and Transient Insomnia, Neurocrine has selected doses for the pivotal Phase III clinical program planned for initiation in the fourth quarter of 2001."

In other clinical news, the company reported that it will initiate a pivotal Phase IIb clinical trial for NBI-6024 in Type I diabetes early in the fourth quarter of 2001. This clinical trial will be a randomized, double blind, placebo-controlled, multi-center, multi-national study, in adolescent and adult patients. The study will involve at least 30 study centers and approximately 400 patients. Neurocrine continues enrollment of its Phase I/II trials with NBI-3001 for glioblastoma. The Company also plans to initiate Phase I studies with NBI-3001 for renal, breast and non-small lung cancer shortly. GlaxoSmithKline and Neurocrine completed enrollment in a multi-dose, safety Phase I clinical trial for NBI-34041 in development for anxiety and depression and irritable bowel syndrome.

Neurocrine Biosciences, Inc. is a product-based biopharmaceutical company focused on neurological and endocrine diseases and disorders. Our product candidates address some of the largest pharmaceutical markets in the world including insomnia, anxiety, depression, malignant brain tumors and peripheral cancers, diabetes, multiple sclerosis, irritable bowel syndrome, eating disorders, pain, stroke, and certain female health disorders. Neurocrine Biosciences, Inc. news releases are available through the Company's website via the Internet at http://www.neurocrine.com.

In addition to historical facts, this press release contains forward- looking statements that involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from those indicated in the forward looking statements are risks and uncertainties associated with Neurocrine's development programs and business and finances including, but not limited to, risk that Neurocrine's drug candidates will not successfully proceed through clinical trials or that later stage clinical trials will not show that they are effective in treating humans; determinations by regulatory and governmental authorities; dependence on corporate collaborators who could terminate their relationships with the Company at any time; uncertainties relating to patent protection and intellectual property rights of third parties; impact of competitive products and technological changes; availability of capital and cost of capital; and other material risks. A more complete description of these risks can be found in the Company's Form 10K for the year ended December 31, 2000 and the current form 10Q each of which should be read before making any investment in Neurocrine common stock. Neurocrine undertakes no obligation to update the statements contained in this press release after the date hereof.

                           NEUROCRINE BIOSCIENCES, INC.
                             Statement of Operations
             (unaudited; in thousands except for loss per share data)

                                 Three Months Ended      Nine Months Ended
                                    September 30,          September 30,
                                 2001         2000      2001          2000
    Revenues:
      Sponsored research
       and development          $5,104      $1,887    $10,948        $4,943
      License and option fees      501         152        959         2,152
      Milestones                15,500          --     15,500            --
      Grant income and
       other revenues              488         386      1,002         1,050
        Total revenues          21,593       2,425     28,409         8,145

    Operating expenses:
      Research and development  18,327      12,499     49,583        28,404
      General and
       administrative            2,073       2,509      7,304         6,930
        Total operating
         expenses               20,400      15,008     56,887        35,334

    Income (loss) from
     operations                  1,193     (12,583)   (28,478)      (27,189)
    Other income and (expenses):
      Interest and other
       income, net               1,175       1,370      5,742         4,293
      Other income and
       expenses, net               139         282        436           926

    Income (loss) before taxes   2,507     (10,931)   (22,300)      (21,970)

    Income taxes                    --         102         --           302

    Net income (loss)           $2,507    $(11,033)  $(22,300)     $(22,272)
    Income (loss) per
     common share:
      Basic                      $0.10      $(0.50)    $(0.87)       $(1.02)
      Diluted                    $0.09      $(0.50)    $(0.87)       $(1.02)

    Shares used in the
     calculation of income
     (loss) per common share:
      Basic                     25,816      22,032     25,575        21,900
      Diluted                   27,972      22,032     25,575        21,900


                                  Balance Sheet
                                  (in thousands)

                                                 September 30,  December 31,
                                                     2001           2000
                                                  (unaudited)
    Cash, cash equivalents and
     marketable securities                           $141,255      $164,670
    Other current assets                               21,414         7,735
        Total current assets                          162,669       172,405

    Property and equipment, net                        12,653        11,300
    Other assets                                        2,632         2,257
    Total assets                                     $177,954      $185,962

    Current liabilities                               $22,410       $14,959
    Long-term liabilities                              10,011         7,795
    Stockholders' equity                              145,533       163,208
        Total liabilities and
         stockholders' equity                        $177,954      $185,962

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SOURCE Neurocrine Biosciences, Inc.
Web site: http: //www.neurocrine.com
CONTACT: Claudia Jones or Paul Hawran of Neurocrine Biosciences, +1-858-658-7600